Public Storage (PSA) 3 Aug 232023 Q2 Earnings call transcript

Company Profile

Participants

Ryan Burke	Vice President of Investor Relations
Joseph Russell	President and Chief Executive Officer
Tom Boyle	Senior Vice President, Chief Financial Officer, and Chief Investment Officer
Michael Goldsmith	UBS
Samir Khanal	Evercore
Todd Thomas	KeyBanc Capital Markets
Jeff Spector	Bank of America
Spenser Allaway	Green Street Advisors
Smedes Rose	Citigroup
Juan Sanabria	BMO Capital Markets
Ki Bin Kim	Truist Securities
Keegan Carl	Wolfe Research
Michael Mueller	J.P. Morgan

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Public Storage Second Quarter 2023 Earnings Call. [Operator Instructions]. It is now my pleasure to turn the floor over to Ryan Burke, Vice President of Investor Relations. Ryan, you may begin.

Ryan Burke

Thank you, Shelby. everyone. Hello, joining second for call. XXXX for us you quarter our earnings Thank here Tom and Joe I'm Russell Boyle. with

subsequent within may we Before begin, forward-looking federal call matters These to forward-looking we you of statements statements securities uncertainties. revise statements XXXX, of constitute speak and are laws. remind assume no or that we want certain untrue and statements events. obligation as become of during risks economic discussed update, the the only All meaning forward-looking certain to supplement subject that X, today, August to this because

the A reconciliation to financial provide GAAP included earnings of on is this release. in our non-GAAP call we measures

publicstorage.com. our find an of call can [Operator audio You replay website, conference Instructions]. release, reports, supplement report, SEC this and our press on

turn Joe. With the to call over that, I'll

Joseph Russell

thank Thank all you, us for today. and you Ryan, joining

As for outlook odds a its with soft and increased results, driving activity demonstrated industry-leading the to rental all of landing; quarter advantages our positive customer year, several across our by maximize platform. performance needs-oriented aspects with higher continues execution platform macro environment across our and our factors of competitive Storage raised base; a second key better-than-expected from Public including

macro We just are to environments operate and all built we proving are in that.

three areas. Let me highlight specific

First, volume second the quarter. we customer growth in year, are Move-in nearly driving XX% in record move-in has the volumes. year-over-year growth up accelerated throughout

end at the We from March the end points XXX the down of June. closed XXX have year-over-year gap points of occupancy to basis basis at down

in rates to mix analytics the determine expectations appropriate rental marketing, team of promotions, and technologies have customer and current environment. right to the We meet the

move outlook experience, our the brand are second of leading users Storage. choosing year. with as difficult easing the half and Drawn of raised the These we clearly comps self-storage year-over-year trends by digital through Public enhanced customer support along our

today matter amidst fully Simply of funded of Storage acquisition dislocation. we the broader a growing as Second, Last very in Self industry. Storage This the something few separates hours. our portfolio market is Monday, billion could Public $X.X we acquirer that are and do a within our few announced and choice companies

strongest the rapid sheet Storage capital, were Self of cost transaction. which on our execution highlighted We and the balance Simply by both have the lowest of

Self With and excited as to we respective Simply future. Storage enhancements acquisition, the combine into operational ours our the immediately are their to achieve we integrate significant strengths and portfolio

example, points X,XXX significant under seen an of billion portfolio platform, improvement operating to in As our from $X.X XXXX basis the ezStorage margin XX% acquired XX%. has

acquisitions, in portfolio our entire to brand will maximize As our Public iconic platform. Storage and the value rebranded we of with Simply Self of do and be the Storage all order to benefits

a to expect portfolio yield nominal We three. stabilize by mid-X% the at year

expectations. robust property digital their benefit their navigating managing renting having a unit, moving well the and when account, in, from operating digital entire fingertips are to exceeding the operating proving transformations we our positioned be are to execution growth model for perspective, From and journey, across continued Third, Customers a across the an win-win-wins site. company. finding strong significant on and unit, options at with result

today. digital continue customers of with over customers through primary be proprietary than online Our more renting that a our million and XX% app ecosystem to leasing reason will downloads PS choose X platform us

new transformation benefits Additionally, And profile financial advancement. to public for and storage team our that create able focus those members us even well. pathways customers, has benefit on career enabled for from to the place being more as excel, our

experience convenience, customer and operating We and The in-person employees customer these of a service result hands and combined for our higher better is putting customers digital and the when margin. tools needed. are where employee with on-site in it's a

put us our access cost growth-oriented position. and platform, NOI of balance in-house a perspective, capital, growth and industry-leading external multifactor sheet an unique From margins, in

have $X.X we year, properties. secured worth this billion of far So

We delivered a over next of million of to more by $X billion two in the be development have development will have and also pipeline than delivered years. $XXX year-end

Our advantages enable us to acquire and develop can't. when others

We ability execute. have for with a to more a appetite matching strong

turn over to the call I'll Tom. Now

Tom Boyle

Joe. Thanks,

sit with and both Business the year per growth more for from As share we year-to-date than excluding representing better quarter, halfway FFO Joe outlook Parks. we through here updated was Core second highlighted, the the performance year-over-year, expected. contribution $X.XX than our PS XX.X%

as key the increased quarter. drove X.X% for at Looking move-in we revenues the Same-store growth. record components

into operations a well, basis direct to perform were and exceeding XXX with leading narrowing existing base margin operating Same-store X.X% occupancy net cost XX%. tenant at X.X%, Our stabilized continued same-store income operating up of year-over-year the July these continues to to trends points gap at month-end. growth

addition recently In the standout, acquired and million of be properties portfolio income total developed XX comprise of lease-up acquisition. and increasing Self than Simply a further feet more an year-over-year. grow pool will same-store, of These the to square continues are the growth. addition net our XXX And XX% the with performance with of XX% Storage this and and operating facilities to engine

driven of Shifting year, growth point to same-store for by outlook our again primarily our guidance. increase revenue remainder of the to year. reflecting outperformance outlook guidance, XX-basis the an We date a the lifted and for to the once improved low end

expense impact lifted primarily at acquisition. outlook of NOI also to outperformance the million the increased Simply also our improved reflect to incorporate and midpoint expectation the expectations Interest non-same-store accordingly. We and $XX by

least, and following June, Simply credit positioned the mentioned, billion size bond appetite as Joe the the growth, XXXX rock but reflect We tripling funded coupled pool to incremental our a in market refinanced from with execute $X.X our of upon future and for outlook Our ability fully position million to in And with untapped expectations, stabilization beyond unsecured the $X.X and its our for $XX well lifted the to remain date, to Simply expectations capital solid. improved million We're NOI the well. stronger the line $XXX outperformance as liquidity last acquisition announcement. billion, for to We strong not non-same-store opportunity. acquisition. immediately

back open for to turn up questions. Shelby it I'll the to Now call

Operator

take We'll first from UBS. Michael Instructions]. Goldsmith [Operator question with our

is open. line Your

Michael Goldsmith

year Good of for morning, NOI question. same-store in and revenue good a for the to the fourth material same-store for growth potential half implies full pretty taking turn guidance with slowdown year growth negative the quarter. back afternoon. Thanks my the in The

or from if and you what the of growth, revenue order to scenarios? have would to these guidance, the move-in and range you and So, as in see input ECRIs middle of Thanks. rates like street hit occupancy, the see realistic conservative volume, bottom

Tom Boyle

with It's Michael. Thanks, a good of Sure. lots question components.

investors a of… a with back, taking we've consistent and step maybe throughout analysts year range providing the So been

Difficulty] [Technical

soft the I've encapsulates an the outlook landing. of where of that we has been different probability that of through move terms we the upper in end the components the of a increased. environment soft experienced outlook, as landing that year, consistent And

about we're And that we baked assuming lower into in the a think the As macroeconomic are environment. more particular, end, that assumptions is tougher of

Difficulty] [Technical

same-store from comps is help same-store and start the pool I to fourth And certainly moderates to about stabilize. growth In there growth. easier of revenue the a it FFO properties continued again, stabilize. standout as well. The midpoint midpoint. outcome by outcome, in think growth overall quarter starts the non-same-store midpoint from that encapsulate But for aided the an but standpoint, negative does

out. within of range outcomes our embedded So a again,

Difficulty] [Technical

Operator

Please stand by.

will you in begin momentarily. Thank conference for patience your holding. Your

To that standby. ask your you continue our to site on and hold, we patience appreciate

moments. few begin will conference in Your a

Ryan Burke

to through Are this you the resume Storage. is you Ryan Public Shelby, Burke hearing Hi. get to to Trying from us? call.

Operator

Yes, Absolutely. sir.

You're continue. and clear, may loud and coming conference in your

Ryan Burke

would those this Thank We're you, Shelby, it. appreciate and at hoping us. we're back that you're we apologies some point. technical hearing through we if go if difficulties. everybody to could We've Q&A, had to Shelby,

Operator

[Operator Instructions]. take our next And of with question from Bank Jeff America. we'll Spector

Your line open. is

And our Street. question Spenser will I'm with Green hearing Allaway move question. to the We'll no response, take from we next next

is line open. Your

Hearing question. We'll from next our moving Samir [Operator on Khanal response, no Evercore. next to take question Instructions]. with the

Samir Khanal

about what morning, Thanks. and Jo move-in the Hi, July, if seeing increases? customer some trends, you're price given maybe you demand of and rates the Can on in Tom. anything, good and side, talk

Tom Boyle

Samir. Yes. Great question,

So, continuing we've from July, trends quarter. largely the seen second in

growth, XX% in the about. X% Move-outs begun again, at it, good we as closing, So, talked down of we as above we in the a as call here Move-outs into customer we earlier, X% move occupancy second mentioned up the down that comps part to are as similar the rent's to year. we again, July. or gap about basis to July. I of X% of prior think of have year. about -- saw points a move-in Easing Move-in moderate, July, XXX components as down activity, sit ultimately leading kind volume down end different

believe July the points think time here. move-in more One and about a really highlight how half where point challenging. a the There's of about I'd challenging ease comps in I first are of we comps talked rate most standpoint, from do we've up is should those from couple the are year the And in is July.

think pathways you that as so, about different anticipating going forward, move-in declines moderate. start year-over-year And to rate we're for the growth

existing performance, records base, stays customer second we're terms at the strong. the In within tenant the length to be continues of quite And quarter. of through

customers activity date year-to-date. well significant than years, customer bit, of than one But to to quite two the stay or given the down here. greater adding that summer be little perform likely to seeing that the a longer-term the year the new bring of we're Some is amounts average base, pool of it mathematically throughout length we're core to greater continues

Samir Khanal

quarter. given maybe the LA of there. you, is bit market wrong have it get solid. sort decelerate been a a but about talking for the little lifted first me I market just the then was maybe don't mean, And restrictions big still from know I like

XX So maybe months sort market you're in maybe kind as through the just to the of seeing kind six we months. of of next talk around that trends think

Joseph Russell

through for funnel continues virtue XXX strong of over market effort. completely very continued demand. come restrictions It's lifting of into well burdened has very three position new will that development, were rebranded We we good cost supply excellent Samir. sites, we've lack Yes, of got land north here we There's even with LA cetera. properties, outside years, have us a of still POT strong the to with top opportunity the market a revenue of The serve portfolio that, and of little or well. that locations. And drive by to clearly good very by We've that documented. occupancy, et still

that going market confident well. and perform So, to is feel positioned continue that, to we're very well

can market that on fact on itself amount you did for pricing Tom is But quite wave a that gone perform bit power that horizon the a some to certainly not recovering, well. to how still through give we feel confident of we we've have color the at we're the period. more looking degree, three-year that based going the little of

Tom Boyle

benefit revenue because if point basis through XXX specifically, points the it's those to And year, And year, facing remember, basis last we're XX on year, the expiration of last you of Yes. of points. fact seeing were basis to This to like customers Samir, XXX more catch-up about XXX we XXXX same-store basis is this restrictions. comps year. attributable playing talked where deceleration you're points that the that really we

is so of it's But not those phenomenon markets to expected our an just moderate marketplace LA And if that's in growth fundamentals as strong. mentioned, the that market to overall, look of Diego, one either, frankly, its remain at comps. San quite well. Joe as you top because continue And

XXXX for through today. Public well performing California Storage Southern

Operator

Todd our question from Thomas And Capital we'll next with KeyBanc Markets. take

is open. line Your

Todd Thomas

me hear you Can okay?

Joseph Russell

Hopefully, can. checking. for you us. hear We can you Thank

Todd Thomas

which build muted a occupancy positive. And -- sounds is a and has seasons, in you bit bit to the loud and been year-over-year gaps about I Yes, prior comp. summer in spring Tom, XQ it a in more occupancy is further like which July, and clear. mentioned July it and wanted tough the than was narrowed ask little

the less sort view? weight year? around and But think spring little you of winter seasonality the fall has prior season, might the the a half in business, the And it mean about of in cycles back peak Labor as prior Day summer less particularly the in through this seasonality the lower expect and than seasonality does think that have year your do has years of and in rental to and that we you bit

Tom Boyle

Yes, that's a question, great Todd.

would some whether lived I haven't has of we years. attributes over one certainly oftentimes July that not play, see factors XXXX no that than as existing the given that. at debate much an could Every well. think year, is what we've market several for seeing some demand had this year June, we sales And we've since seasonal year stepping of the its volumes period, is on May, as been typical some I was all year. a unique different highlight. would housing impact and the demand XXXX, through the time highlighting XXXX in had one declining, back, And last certainly, and having This home we of we're time the a

being I said, we've one reasons primary as the activity folks space run And which good somewhat that's that, on That occupancy the the do by that's see of volumes, that up the build already for year. also we've very highlighted of move existing out move-in call. by And at we selling their not homes. as difference continue continued think in people through to is to tied renter to made home,

today that we new so, of good feel different about year. it we're acquiring customers And a the level but is

we'd little to occupancy the first second in closing of the a half, anticipate of year continued move probably part played the question think bit around move second the through as to dynamic, likely that out we our as how which of that the of and thoughts has gap because impact does your your less is through how year. on year-over-year demand I a we decline would seasonal modest that to we lead see maybe year, then occupancy And

Joseph Russell

couple it's And to we've an to what other and Todd, of in theories this you are counter-affects tied traditional just And kinds or have whether interpret highlight housing, of events things, environments. have be components to or different And shifting. nimble or to deploy all may directly able to be like the hybrid range as predictable quite is seasonality the a to point, seasonality effects what since impacts, environment of are work-from-home Tom's XXXX, learned you shifting.

and to to there's predict interpret we news bit can upended during that good too movement the is pandemic. able very same I platform the there. college, and can predictability good period seeing we are consistent seem our actually little that less tell would one changing so you a driver back we're demand be, the just demand maybe time. the by and new at around out, factors, maneuver ability be got of many even seems to predictable to That and is with likely factors, with think some Tom we're of which pointed But of be our be additional what deep-seated seasonality, us but as to customer through time, driven for

Todd Thomas

Okay.

feel year? back the account Day I moving seasonality terms ordinarily of Tom, the of move-out activity today? lower half guidance, And you year, in rental just the of would of I by do driven the then terms revised guess so, occupancy in less the you the through second healthier, the related activity I mean, housing half last that a you to sort in staying piece here, longer Labor of does portfolio less in for than see the in activity that customer have market, with And guess loss

Tom Boyle

yes. up So, component there, your is we're first them adding of question here,

what incorporate highlighted does is earlier. outlook -- the I So,

is The have in that stay of one Joe are good highlight, of exhibiting moved the to is storage. second use and customers because component highlighted longer you're for highlighting what a also length cases that of and your that around what year-to-date attributes question

So through consistently, of into 'XX. you encouraging year, move-ins base of heading than each 'XX kind are of better durability about which the month's performing the revenue and think and is tenant cohort prior as

Todd Thomas

you. Thank Okay.

Operator

from America. Bank Jeff question next of our take we'll And Spector with

Your line is open.

Jeff Spector

I to last record let's you. tie going into guess, of first just year the through some I go say, the and comments the about rates. the and right to, -- how at private like, Thank but better-than-expected rate. half, move-ins, thinking mentioning least wanted on back the this your you're June, street You're it bringing do street customers, compete through you how lower sounds you're concerns, and continue follow-on it? on explain dynamic weaker to in Like

great continues think we this there's your to about existing on it how eventually that existing And to should dynamic? will customer impact concern but exhibit again, So ability that push behavior. that

So, it bit confusing. is a

Tom Boyle

Jeff, too. that there's to question, right. parts number good of All a

Let's one. them one by take

are So, well. the advertising is spoke quite that good move-in paired granular ops team to. to. run around we pricing think think our move-in ecosystem the tools and dynamic working are quite drive a well volumes, have process, highlighted We as Joe reacting built to that and we our Joe point and volume, your with digital to We earlier, very customers

So, all brand, with drive I certainly of that, combined helping good our move-in think volumes. it's

is, like, there's has new industry I more the as of were quarter. point a there's for overall, rental very getting there. We no but lower noted, components rate, question One and think of prior rates, are the customers competitive into in couple this your specifically year, as and on good customers through they them, been volume feel second vacancy the the than last lowered it's and year that a move-in about I rents year, XX% good environment in today. down we're what a

the quarter, areas. about competitors you give percent second the were To our within a couple our above context, trade rents in

competitors beginning very So, is charging good the the we fall moved last of we're with in of volume as components charging one the drives our and are what through part certainly this associated year. the but that It deceleration that. revenue growth through of traction largely and marketplace seeing

that overall, today, outlook could move be we forward. growth here the ease, the been to the revenue move of we factor we year, be our drag should start half as as we but And certainly we second to sit through in print that's as look comps embedded do year. But that's think and noted the as I the a stabilizing the and earlier a through trough July

impact that's customer the One two about. increases. is We in talk calls, its existing to existing very consistent to to And well. component tenant it is continues how perform customer And question like been noted base we've speaking base components. performing. to third about as I've in something the prior related on The in quite your rate

the tenants, accepting of Delinquencies one-year, are below our increases. the continue levels and pre-pandemic of rate rental So, longer-term stays two-year-plus of are length they be strong. to

what that years is has tenants past is The out. thing over replace move it changed two the to they those when

rental it's the actually cost the to certainly to from back if so tenants lower magnitude in second replacement cost highlighted, year-over-year. certain in start to frequency there they February would And lower the those And rates certainly to going we and markets, is -- increases that replace but have you in That's told those years. you of was that's in XXXX, what And this there point. benefit which real has move. year, here led component, a of a as what lower sit that we tenants certain move-in again July versus replace, prior of on through change no flipped

Jeff Spector

helpful. first the could repeat if And a incoming very your kind ask, given half the first of question answer Okay, guidance. I getting I'm to to few on back

that I a that try And still to end that guidance, does we of I it of still lot it reflects missed think maybe recessionary reflect clarify bottom like scenario? sounds just that answer. -- the would

Tom Boyle

bummer And response, Hopefully, you number that this I'll two. Jeff. couldn't attempt it Thanks, Yes. go hear for at my first but works.

year, And outlook raised year. we because for through move the year-to-date earlier, of the we as that's as as X better-than-expected outlook improved the well it we've of performance So, highlighted second half times. now the

an speaking -- outcomes. wide as environment, in that's potential obviously, is February line. range a all which backdrop macro well combination a to impacted the consumer relatively living shift, outlook uncertain that since as and continues by of as a And day-to-day that by macro that of we're consistent still been We've about driven

typical year. of on which half the of here is does impact may start there's play have end could that landing it would leading Again, higher vacate the in consumer move something on as to stay certainly macro at stick potential improved through in much tougher frequency. an be seeing second doesn't a that environment. at a quite guidance the the to Fed It the lower doesn't what longer-term of XXXX as year of end. the but length the we're we At the outlook But today our have lower certainly encapsulate the XXXX, and out weakens, not customers possibility as that

And a we've range second which earlier, point a soft performance a which we good the landing base, something a still lead is move-in half, side, well. year-to-date, is that the existing fair, that a competitive the the as think competitive tenant seen the continue very of though, easing to environment. comps potential continued strong that flip for end is higher also The from and move-in to there's which in would of environment,

improving half, here. second The good again, range we encapsulate of move broad we outlook's a as through but outcomes So potential year-to-date. do performance still the that

Jeff Spector

Thank you.

Operator

with And we'll from question Green Allaway next Spenser take our Street.

open. Your line is

Spenser Allaway

Thank you. you Can me? guys hear

Joseph Russell

Thanks, We can. being Spenser, for patient.

Spenser Allaway

No problem.

talk but was this and norms? you marketing that or -- absolute given just how that's in and much So, spend you costs customer apologies historic is [indiscernible] the covered, how versus 'XX. weren't spending up if does quarter understandable, about trend curious that if this sorry, trending, can But acquisition

Tom Boyle

Yes. Spenser. Thanks,

year-over-year high we noted last growth clearly because year. in didn't really spend marketing you spend So,

way think about periods through that good And in to And that percentage it pre-pandemic at X% of that time the second track below one were to of a spend averages as that's X% percentage X.X% is believe the revenue. quarter, range. we revenue. was the of bit I in marketing I a look

overall with our If very good we frankly are reasons toolkit from customer you tool, volume, of costs tools use good and attractive, in to why we're which the continue is that. about seeing other think to the along move-in drive one acquisition response that

So, use acquisition the an spend as to good ability of we a to get if customer have and return. continue toolkit marketing there we'll to continue component spend

Spenser Allaway

are of Simply receiving you assets that it and the Where commented in relates inbounds? XQ seeing of you deal? you activity. a volume Okay, of much inbound XQ were then XQ? in were on as guys that the Can do deal you acquired great. outside And potential And to ‘XX kind activity comment calls high then how you just

Joseph Russell

sector pretty transaction to similar the Yes. in is XXXX. amount Sure, standpoint, a saw what Spenser. we volume from of Year-to-date,

are with active your more coming environment Many for tell are the from the you, would only are past and that a level market otherwise calls the a there can traditional in I us. of number or of not So, Clearly, to a commitment looking different as into capable years coming point, to today. lending capital, inbound a of of surety buyers close active the not would as take of a cost be place. capital, availability or they number owners

a that So us leg up. gives

are time very As and choice. We've to very I mentioned, a we hearing, again, execute we're an got to acquirer opportunity effectively. continue of unique

Just very scale very the market asset position. on as we deal. a -- portfolio. a in whether one-off existing discussions It's Simply did, have or transaction know the obviously, large owner, the at with typically well with it's We efficient quite again, a an

So, for directly been good by and and be that and of can there's we're more of opportunity close, contacted it's the that efficient virtue much a effective using fact window being we're us. very we and surety more

the through the many So came opportunities of We're were those and makes quality where traditional economics still sense. question, along lines. of the the deals, your marketed that asset to doing

that's to smaller be busy. portfolio, deal acquisition that and us, or $X.X a post continues One a plays billion And additional one-off a the of the days be inbounds played through, growth deal, through things knowing, that good team and the it's again, we bread-and-butter effectiveness much whether continues fresh, opportunity some are Simply the of now to getting announcement that again, XX acquisition. on for

focused of quarter going year, time or so this typically good so typical next opportunities, we stay active we're is in for a very transaction the on year to of that, to continue As and time feel spot. we're more

Spenser Allaway

much. so Thanks,

Operator

with from next We'll take Rose question our Citi. Smedes

Smedes Rose

ask, portfolio. Life your just it how quickly from you I that some able thank decision you you. to would Simply the compare And with versus to that wanted the remarks like acquire of the you acquisition very maybe wondering opportunities decision the portfolio. saw a Hi, of acquisition come were original was Storage just proposed your to I sounds on to

Joseph Russell

different very processes moving and level Smedes, a opportunities of got private traditional Well, maybe M&A complexity different parts whole opportunity. a than and

Simply transaction, the a was their to deal the a directly a was that advisory. market more or where own through was market to process it Speaking brought that

And process to so, there went that portfolio was the through the market. Blackstone to bring a

and so crisp in size of it we -- been portfolio place into knew that nearly had that of years, very knowledge its the portfolio, had the evolution has going and portfolio by and up quite well. for of studied we Because was Blackstone. good the understood the process We XX set

So again, at good us to opportunity it integrate look size, of for that very effectively. very portfolio a

As we're middle in expect we the days and right process into now, about September. mentioned, close I XX the to of

By all more, announced accounts, we the the than when bit, integration opportunity was looks compelling it every if not deal.

properties our third-party So the XXX XX in ability very are confident assets the about integrate and that to the management platform.

think in deal roughly very or confident very transaction But very of the assets our you integrate to strong In we're if very returns, of get good is the and So, Mini. beginning those feel timing size. about ability since quickly. it's done the that XXXX a a capital, of XXXX of Manhattan allocate about market, largest strong been the this ability that's capital that the to allocate private end

Smedes Rose

wanted you make contribution called of just that then out, the Simply sure, And the I million non-same-store to execution? includes $XXX the

Joseph Russell

Yes, it does.

Tom Boyle

Yes, it does.

Smedes Rose

Okay, thank you.

Tom Boyle

Thanks, Smedes.

Operator

And with we'll our take Sanabria question next Markets. BMO Capital Juan from

open. Your is line

Juan Sanabria

areas Just two and of side, the together. marrying balance those sheet, curious on investment kind the

You the lot on accretion dry was used initially. here the of and a modest of kind simply, powder

yield going into what So, of kind cap just we the that capital. or and expectations what kind deploying rates precious about of should is think how capacity remaining curious

Tom Boyle

Yes. Well, happy that. take to

the estate across we any at way it an about As that looked underwriting attractive or you the think transaction real Simply viewed we really you as of it capital. portfolio, underwrite cost

We about quickly. on we've unlevered in an returns basis spoken the certainly basis at estate in things very and order acquire we've an unlevered view well to despite assets used prior the level look in fact, on leverage real past, things As years, basis. we as as

We an Simply as transaction view one. attractive the

times, X.X is our grow leverage the anticipating to sorts FFO our below we're gives around X%. at was accretion, X%, We That's times pretty And the we of to by asset base bit X.X comment by and significant times. X time us the a growing it ratio. Your of right about times, target grew for transactions. a X good increased capacity to which long-term which still good

highlighted, that. to do Joe As poised we're

I To billion higher continue $X of post-transaction, to of we capacity to give target context, have grow that of over end the you towards ours. long-term think

So, still good good grow estate actively are to platform. a capacity bit have and opportunities of real very the seeking

Juan Sanabria

that the a that you would any to if just expect more curious back follow-up, get-back maybe to thought leasing softer weaker, true, may made given and bigger that or season a the the climb modest you in whether it's holding see you something actually leasing during experienced consumer earlier see opposite that But it's than comments half. decel there's kind get-back that date, that, laying or steeper housing normal. my peak the surface that the under as a portends didn't Just of because the peak an the season actually

there. -- Just on curious those thoughts that

Tom Boyle

of lengths stay, second we through activity the is the our into length see we've customers stay. that belief range less as half typically range so, Sure, big we think potential of have of around moved seasonal shorter be our the encapsulated a in that have of we that didn't highlighted outlook. wide date I comments walked by Juan. don't supports that and now outcomes, year. which do an been I mean, fact occupancy have we decline see our really can the driven through of And demand a My the move-out that longer earlier

some our well-positioned year we're guideposts Ultimately, that we'll very plays like in to and the range half. looks feel how we've given second And navigate what see through have to the to throughout out. environment you like outlook the as

Juan Sanabria

you Thank much. tom. Thank very

Tom Boyle

man. Thanks,

Operator

from Truist. And Bin Ki question we'll next take our with Kim

Your line is open.

And next We'll to no Keegan response, take hearing question moving the question. with Research. Carl our Wolfe next from

Your line is open.

moving next Goldsmith Hearing next We'll Instructions]. response, to question the question. with UBS. no our Michael from [Operator take

line Your open. is

Michael Goldsmith

average that. XX.X%, XX.X%. the occupancy on June is the than kind at portfolio the my occupancy of end question, in March of of XX.X%, through the of the was was and the As second of quarter and of all kind end which second the of Occupancy higher end was XX.X%, May But quarter. was churn

So, within environment you of your think loss does a high-quality, these the the been in of of there's there's elevated more where mean some churn? do churn that high-rate bit maybe potential portfolio little that driving that the And customers portfolio? an how growth about elevated have

Tom Boyle

July, Yes. Thanks, first move-out the is the Michael. quarter. One, A only X% year-over-year to in couple in year-over-year. volume of highlighted in churn up volume's growth year-over-year move improving components through you as basis year. see that second there. we then can the quarter And on the actually And move-out compared I a

tenant continue have to base. see good from behavior customers stays the So, earlier have attractive. been that Highlighted moved in from of that length new

the feel normalization we year from churn on good about base through easier base of and as customer overall that the tenant move And out. so, comps we playing

in, peaks occupancy and operate you portfolio the That's of and average the which to case of end, the about occupancy the As case average middle out, going and activity think see back we period in, we because half lift the lowers move-out in month, the month difference month, and occupancy. month typically and month consistently then towards month how the more the that's occupancy the out. our between of be or the the

nothing concerning there. so, And

end through than in lift it those You the occupancy and i.e., June in was May. higher in lift the periods, average can interpret was in the period as higher

Michael Goldsmith

Got second stepped it. from quarter by to basis And the growth to points the just quarter, same-store XXX first down revenue X.X%.

get of the year, better of rest the to the the through reflect cadence easier? the just step-downs trying smaller? I'm the you it. we getting as step-down like just that understand guys As see does does comparisons move And

Tom Boyle

to ease highlighted cadence to really the comps Michael. I think, that in begin step-downs the question October. good and we've will The start of ease Okay, September,

as so, sit And July I do move half comps highlighted ease we year. we and in the through, the as we would anticipate are quite comps move as actually through challenging we back the of here earlier,

quarter moderation differing a range embedded deceleration anticipate range the third comps that is of would in so, help, of quarter. And outlooks versus but rate obviously in particularly that of the fourth that but

Michael Goldsmith

luck Got half. in Good back it. the

Tom Boyle

Michael. Thanks,

Operator

[Operator Instructions]. Mike JPMorgan. next Mueller with We'll take our from question

Your line is open.

question the Ki Hearing take Bin Instructions] to moving question. next with Truist. no response, our on from We'll Kim next [Operator

is open. Your line

Ki Bin Kim

hear me? Hi, can you

Joseph Russell

Yes.

Tom Boyle

Yes.

Ki Bin Kim

you. thank Yes,

call curious when does your year, So, I'm about at a going rates that move-in want to normal X.X% compare? like say, you how just X.X% into it, XQ. increased sequentially look increase you whatever

Tom Boyle

like Yes, an the typical year. little the see typically a you bit you'd end low year, year in pricing see see. Typically, of more more difference you that And midpoint the occupancy the more a of lower teens power. that Ki occupancy more what between in Bin, is a than associated increase see year, you'd seasonal of lift, lift, and and with

first you quarter digits full quarter it's comparison, increase. probably about to if And second upper single full first so, quarter think second versus

seasonal themes So, the in a second speaking about but with in we've quarter. little little same less a been demand, the softer particular, along bit that bit

Ki Bin Kim

in XXXX, before back under And million and much obviously, $XXX pretty million historically, $XXX your that. million for it year, the was you under terms every of look guidance year Okay. $XXX in CapEx when

curious should this just and versus about level? more approaching we historical more So, returning a that's how elevated back of CapEx like think I'm newer from many to more years something

Joseph Russell

Ki parts moving A there. of couple Yes, Bin.

So, through spending to end time It the we're of in $XXX the part We're continue of the completed Tomorrow XXXX the of targeting that may way initiative. XXXX. that full period. so taper X/X will through million portfolio our get of Property

is spend just to of on The Tomorrow Property that other the effective of that to easing the invest additional very of but of that down to we're program continue component solar. program top going tied

solar into we're many, initiatives many our more putting So, in additional dollars markets.

may to what include solar with is And to goal continued level grow certain an you markets. orientation, just to that's announcement which would program doing in seen made X,XXX solar needs the community property we're well. yesterday, relative we some to Our That's itself. get of a have properties of north as

So, we've couple capital a relative of spend elevated more relative those little year-over-year for with a to got we're on spend. seeing But that, can Tom, outlook on a still you years factors, what basis. to give color

Tom Boyle

the the to up on Property that spend very point, we're Joe's the think I will program wrap solar, mid-teens point, is go getting away. And capital Yes. Joe's opportunity. we of got a Tomorrow on expectation good And the and that To we're IRRs about year, at lot on of getting in years. properties, end properties the investing X,XXX solar of over a we're targeting there. several program, opportunity of with spend, next the think, The over when having we've we XXX

but of opportunity will So, be spent good lot return there a it. also a capital associated with with that

Ki Bin Kim

thank you. Okay,

Tom Boyle

you. Thank

Operator

with next Carl Keegan question take We'll our Research. Wolfe from

Your open. line is

Keegan Carl

me? hear guys you Can

Joseph Russell

We can.

Keegan Carl

cool. right, All Helpful.

up the contract same-store year-over-year. rent is annual foot square in X.X% per pool So,

the Just increase looking the sending more ECRI rate you of on your plans color for are some on back it out? What half program. are year? the what And for

Tom Boyle

of highlighted the Yes. continue earlier rate components on tenant we think Keegan, tenants I question the the about as perform as as cost, tenant well increase behavior well. and performance to when a two existing existing program as the existing replacement

increases drive are tenant half. to which So, to those that that we're you the increases but prior sending less rate that being the healthy But of than the is well. less they're base, year, increases and still saw tenant helping first performance are base, and magnitude that by the frequencies through rental accepted as

Keegan Carl

the half Is a that, assumption fair the continues moderate? of then that that back to year for

Tom Boyle

around half. the we'd through that what say through highlighted saw pretty everything year, because as similar anticipate the I well and as it's churn that we I'd occupancy rate comps rental rates, of as earlier the first

Keegan Carl

to third-party management Okay. your And gears platform. shifting then

stores in net quarter. XX added guys You the

seeing you Life that two, back you're to today. out portfolio the acquiring come any there Storage, what one, are from market of new curious, customers you? seeing extra on And in Just the space

Joseph Russell

We of in by the quarter. of being Keegan. another actually, one then party. virtue Yes, added, sold XX And to platform out the was taken properties

to into think, typically through is dominant and still on processes. factor platform So, we're We've developing coming a seeing side that conversations of the development I that program business. host relative the the a We're of assets. whole now got, at encouraging XXX properties play relationships through

program. or entertain and platform, some time as they're third-party other and to any If in good pretty unique traction we hands platform changing portfolio a is, continue the welcome have asking, there's certainly to opportunity very third-party not, whether We'll a grow always to another but it. any it might public that flagged it to time, very component assets, got as got and in to we've opportunities, from management a you're the good existing do. We've relative private, seeing we're offering, or management

Keegan Carl

Thanks for that.

Joseph Russell

you. Thank

Operator

next from question Mueller We'll Michael take you. Thank with our JPMorgan.

Your line is open.

Michael Mueller

time? me Can you this hear

Joseph Russell

for Thanks trying We can, again. Mike.

Michael Mueller

you're you XX:XX year I I sizes? and a had notable two could silence. about pool in if changes talked no I clue in talk customers the because years dialed for of seeing already. Yes, if back you over place percentage about this at dropped any those had and and But basically to

Joseph Russell

[indiscernible] been question, No, not some asked. color. that's you give

Tom Boyle

with as X%, the length So, what continue was for longer two to good up base than from tenant performance that it very still is we our compared have of instance, see X% XXs, to the stay longer which of customers low years, pre-pandemic. been customers, in a us percentage for is

to group. very performance continue So, composition as from that see as well strong

cycle be to many stay getting coming to into experiencing potential length the norms. overall overall, to to length in. average good pre-pandemic a But I starts tenants the and above continue the a about start that newer going of to that basis. The are solid are new so of are moderate And down. on stay better talking the customers highlighted that new we're because bring good continue customers actually tenants a we're earlier that bit which we're likely also trends longer-term year-over-year average platform, that acquiring

Michael Mueller

Got it you. okay thank great

Tom Boyle

Thanks, Michael.

Operator

question Sanabria we'll And Juan BMO Capital Markets. take our next with from

Your line is open.

Juan Sanabria

Hey. A quick follow-up.

or just steady? to the or increases all that is at ECRI expectations holding wanted confirm, On pace cadence of has start I question, declined to your year year-to-date from the the initial

Tom Boyle

Juan, get steady. won't generally but I which consistent it's There's holding speaking, quite seasonal plan factors on some into, with expectations. and

Juan Sanabria

humor if you And then one me. more, could just great. Okay,

or fourth quarter to the does rate? Layering Just exit guidance for the of easier comps run into fall. decel what the So, the kind in trying range imply about think

Tom Boyle

Yes.

a half tougher to comps growth through would outlook macro range exiting lead question, end, the the The and end No into higher same-store dipping positive. is the environment. the the the negative that revenue Again, remains growth At again, low lead same-store easier encapsulates So the territory to at range. in lower year stabilization of there. manner. that of those revenue that would likely end anticipate we a second

there. the between midpoint Obviously, in is

quarter, through the as in on move the I touch on in to that certainly performance on the year-to-date through continue we you end year. update update encouraged performance, positive But third and where fourth year. range quarter. through up We've the think midpoint does been again, we we'll the we'll and negative you

Juan Sanabria

Thank you for patient. being

Tom Boyle

Juan. being patient. Thank Thanks, you for

Operator

at Ryan this will Burke it program I no additional further that back closing time. And for or any we remarks. to appears the questions have over now turn

Ryan Burke

good We your thanks today once you and of difficulties. for We the have patience Thank all technical appreciate into it. rest you and a Shelby, hope to of on week weekend. again you, the the

Operator

That concludes your today's teleconference. Thank you participation. for

You disconnect. now may

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.